Key Contacts: Brendan O’Connor – Partner | Harry O’Malley – Senior Associate |
The Residential Tenancies (Miscellaneous Provisions) Bill 2026 (the “Bill”) introduces a fundamental shift in the Irish rental landscape. With the current Rent Pressure Zones (“RPZ”) framework expiring on 28 February 2026, the Government is moving toward a 1 March 2026 commencement for a more codified, national system.
Key Changes
Universal Rent Control System:
The Bill replaces local RPZs with a National Rent Control System linked to the Consumer Price Index (“CPI”),capped at 2% per annum. To encourage supply, newly built apartments commenced after 10 June 2025 are permitted to track CPI without being subject to the 2% cap.
Tenancies of Minimum Duration (“TMD”)
Tenancies created after 1 March 2026 will operate on rolling 6-year cycles. This creates a “two-tier” environment for landlords:
- Large Landlords (private individuals with four or more tenancies): Face significantly restricted termination grounds, effectively losing the ability to terminate for sale or personal use during the cycle. Importantly, this also applies to any registered company, which will automatically be deemed a large landlord regardless of unit count.
- Small Landlords (private individuals with three or less tenancies): Retain these termination rights only under strictly defined “hardship” conditions. Such grounds include, but are not limited to:
- Financial Distress: Evidence that a sale is required to discharge debt or prevent bankruptcy.
- Personal Necessity: The property is required for the landlord or an immediate family member (spouse, civil partner, child, or parent) to use as their primary residence.
Market Resets: Landlords are entitled to reset rent to current market rates at the conclusion of each six-year cycle, provided the tenancy was not preceded by a “no-fault” termination. For the purposes of this rule, a no‑fault termination refers to a landlord ending a tenancy for reasons unrelated to any breach by the tenant such as the sale of the property, the landlord’s intention to occupy it, substantial refurbishment, or a change of use. Where a tenancy ends for any of these reasons, a landlord cannot rely on the market reset mechanism.
Narrowing the “Market Reset” Window
The Bill significantly restricts “fresh start” rent setting, which currently permits a market reset only in limited circumstances:
- Mandatory Baseline: Rents for new tenancies must generally be based on the previous tenant’s rent, plus the allowed annual increase (capped at 2% or inflation).
- Two-Year Loophole: A market “reset” is currently permitted if the property has been vacant for 24 months prior to the new letting.
- Substantial Change: Resets are also allowed following a “substantial change” in the property’s nature (e.g., major structural renovations that significantly increase floor space).
The Bill closes existing loopholes by prohibiting a market reset where a tenancy is terminated on “no-fault” grounds, such as sale or refurbishment. Under the new regime, resets to market rates are strictly limited to the conclusion of each six-year cycle, or instances where a tenancy ends due to a tenant’s voluntary departure or a breach of obligations.
Operational Precision and Compliance – Ensuring Heightened Transparency
Administrative accuracy is now a legal prerequisite. Key changes include:
- Rental History: Landlords must provide a verified dossier (previous rent, floor area, and BER) to the Residential Tenancies Board (“RTB”) and tenant at the lease outset.
- Same Day Notification: A Notice of Termination is invalid unless served on the RTB the same day it is issued to the tenant.
Private Rented Sector and Build to Rent
The Bill introduces a targeted “carve-out” designed to maintain the viability of the Build to Rent and student accommodation pipelines. For qualifying developments where a commencement notice is submitted on or after 10 June 2025, developers may set initial rents at market rates, bypassing the standard 2% or CPI caps. This vital window allows institutional investors to de risk new projects by aligning first-time yields with current market costs. However, this is a one-time “reset” benefit; once the first tenancy is established, the asset returns to the standard rent-cap framework for all subsequent reviews. Crucially, this flexibility also extends to major redevelopments that increase a building’s floor area by at least 25% or involve a significant change of use, provided the project strictly adheres to all Building Control regulations.
Conclusion
While the 1 March deadline is ambitious, the shift toward a more regulated framework is clear. We recommend that stakeholders begin reviewing leasing documents and internal notice procedures now to ensure a seamless transition.
While the Bill primarily targets tenancies created after 1 March 2026, landlords must note that the new administrative standards apply immediately to all existing portfolios. While current 6-year cycles may remain governed by existing rules, any rent review or termination notice served after the commencement date must strictly adhere to the new mandatory RTB notification procedures.
If you have questions regarding the impact of these reforms on your portfolio or upcoming transactions, please contact Brendan O’Connor, Harry O’Malley or your usual Philip Lee LLP contact.
Article written with the assistance of Kayleigh Leonard.
